Chiang put quick end to latest QEIA-SIG dispute - no cut coming

An effort to cut $150 million in funding to districts participating in both a state and federal program for low-performing schools came to an abrupt end Wednesday when State Controller John Chiang announced he would not make the reduction.

Chiang's announcement came just a week after state Sen. Denise Ducheny, chair of the Joint Legislative Budget Committee, requested the controller reduce funding to districts getting support from both federal School Improvement Grants and the state's Quality Education Investment Act program.

Ducheny has said that she believed districts enrolled in both programs were getting more than their share of state dollars because the California Department of Education did not follow legislative directive to make the reduction last year.

But in a letter to Ducheny Wednesday, Chiang said that he had looked over the issue and believes that the CDE acted properly.

The controller pointed out that the legislation in question, ABX3 56, required that state QEIA funding should be replaced by federal SIG funds to districts participating in both programs if the State Superintendent of Public Instruction determined the federal money could be used for the state program. And the superintendent determined that SIG money could not be used to pay for QEIA.

The chapter clearly provides the superintendent with the responsibility to determine the amount available, if any, for a general fund offset," Chiang wrote. "Absent a legal basis to implement the proposed transfer, I cannot comply with your request."

The controller's notice will bring much relief to a number of districts that faced a significant and immediate funding cut. Los Angeles Unified, for instance, would have lost $49 million from the next scheduled revenue limit apportionment.

But the news doesn't help the Legislature in building solutions to cover a shortfall of $19 billion in a budget that is now 92 days overdue.

QEIA, which costs the state's general fund about $350 million annually, is the product of a lawsuit settlement between Gov. Arnold Schwarzenegger and the California Teachers Association. The QEIA funds pay for smaller class sizes and counseling services, among other things, at about 500 low-performing schools.

The SIG program, which was significantly revised by the Obama administration this year, is a federal program also aimed at a state's lowest performing schools but with different objectives and guidelines than QEIA.

Officials at the CDE, as well as opponents of Ducheny's proposal, have said that SIG money cannot be used to replace existing state support under federal supplanting laws.

Ducheny had argued that regardless of other issues, state legislation required the CDE to reduce funding to schools in both programs and that was not carried out.

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